Drill Tracker Weekly: Lake Shore Gold Confirms Mineralization at 144 Gap

Lake Shore Gold (TSX:LSG)

Price: $1.18

Market cap: $514 million

Cash estimate: $84 million

Project: Thunder Creek

Country: Canada

Ownership: 100 percent

Reserves: 3.7 million tonnes @ 4.3 g/t Au

Project status: Resource development

• Lake Shore Mining announced results from the first ten holes from the underground exploration drilling into the 144 Gap zones adjacent to the Thunder Creek deposit on its 100% owned Timmins West Mine in Ontario. Lake Shore Gold acquired the Thunder Creek deposit in 2009 though the $319 million purchase of West Timmins Mines.
• Highlights from the underground drilling include 36.8 metres grading 6.29 g/t Au and 31.8 metres of 5.29 g/t Au. The drilling has outlined a mineralized zone in the 144 Gap with a minimum strike length of 400 metres and a dip length of 400 metres.
• The mineralization is hosted within a similar syenite intrusion as the nearby Thunder Creek Deposit in association with the same volcanic / ultramafic / intrusive / sedimentary contacts. Gold mineralization is associated with quartz veining, pyrite, sheelite and/or galena with visible gold within the quartz veins.
• The 144 Gap Zone is within 500 metres from the Thunder Creek Deposit and to facilitate lower cost underground drilling, the company is currently 90% complete an exploration drift from Thunder Creek. The Company has increased the exploration budget to $25.0 million to complete a 180,000 metre surface and underground drilling program for 2015 with the goal of replacing annual production with new upgraded resource ounces. As well as the underground drilling, the Company has five surface drill targeting new areas to the southwest of 144 Gap.
• The Company is well funded though cash flow from the operating Timmins West Mine with net cash flow to date for 2015 of $39 million.. The Company has working capital (including bullion inventory) of $84 million. In H1/2015 the mine beat guidance producing 95,600 at an all in sustaining cost of $809 per ounce gold. In May 2015, the Company repaid its senior secured debt and is debt free.

Discovery history 144 Gap (October 2014): 46.0 metres @ 5.37 g/t Au

Current underground drilling 144 Gap: 36.8 metres @ 6.29 g/t Au; 31.8 metres @ 5.29 g/t Au; 10.40 metres @ 7.81 g/t Au

 
Risk Analysis
Data contained in DRILL TRACKER WEEKLY is based on early stage exploration activity. The results are obtained at the very early stages of exploration and therefore, individual results may not be reproducible with additional trenching or drilling, nor may the results ultimately lead to the discovery of an economic deposit. Delineation of a resource body requires an extensive data gathering exercise according to guidelines set out in National Instrument 43-101 before investors can be reliably assured of a competent body of mineralization that may be of economic interest. DRILL TRACKER WEEKLY is designed to highlight individual trench or drill results, which stand out as being materially anomalous and are particularly worth of note – a type of early warning flag for a particular property that warrants further attention. Hence, DRILL TRACKER WEEKLY does not provide a recommendation to buy, sell or hold a specific equity – it is an information reference source to help quantify the meaning and relevance of early stage exploration results.
Relevant Disclosures Applicable to: Drill Tracker Weekly

1. The research analyst or a member of the research analyst’s household owns and/or has options to acquire shares of the subject issuer. At the date of this release the author, Wayne Hewgill, owns no shares in the companies in this report. 
2. Lake Shore Gold Corp. (LSG) is covered by Mackie Research Capital Corp. by analyst Barry Allan.

Analyst Certification
I, Wayne Hewgill certify that the information in this report is sourced through public documents that are believed to be reliable but accuracy and completeness as represented in this report cannot be guaranteed. The author has not received payment from any of the companies covered in this report. This report makes no recommendations to buy, sell or hold. Each analyst of Mackie Research Capital Corporation whose name appears in this report hereby certifies that (i) the recommendations and opinions expressed in this research report accurately reflect the analyst’s personal views and (ii) no part of the research analyst’s compensation was or will be directly or indirectly related to the specific conclusions or recommendations expressed in this research report.